Instructions for Schedule A (Form 990 or 990-EZ)

Transcription

1 2004 Instructions for Schedule A (Form 990 or 990-EZ) Section references are to the Internal Revenue Code unless otherwise noted. Department of the Treasury Internal Revenue Service Contents Page 501(k), Child Care Organizations, and Show totals on the printed form. Part I. Compensation of the Five 501(n), Charitable Risk Pools. Put the organization s name and Highest Paid Employees Other employer identification number (EIN) on Than Officers, Directors, and Who Must File the attached separate sheets and identify Trustees... 1 An organization described in section the part or line that the attachments Part II. Compensation of the Five 501(c)(3) or a nonexempt charitable trust support. Highest Paid Independent described in section 4947(a)(1) must You may round off cents to whole Contractors for Professional complete and attach Schedule A (Form dollars on your return and schedules. If Services or 990-EZ) to its Form 990 or Form you do round to whole dollars, you must 990-EZ. round all amounts. To round, drop Part III. Statements About amounts under 50 cents and increase Activities... 2 If an organization is not required to file amounts from 50 to 99 cents to the next Part IV. Reason for Non-Private Form 990, or Form 990-EZ, it is not dollar. For example, $1.39 becomes $1 Foundation Status... 3 required to file Schedule A (Form 990 or and $2.50 becomes $3. Part IV-A. Support Schedule EZ). Part V. Private School If you have to add two or more Do not use Schedule A (Form 990 or amounts to figure the amount to enter on Questionnaire EZ) if an organization is a private a line, include cents when adding the Part VI-A. Lobbying foundation. Instead, file Form 990-PF, amounts and round off only the total. Expenditures by Electing Return of Private Foundation. Public Charities... 9 Part I. Compensation of Part VI-B. Lobbying Activity by Period Covered Nonelecting Public Charities The organization s Schedule A (Form 990 the Five Highest Paid Part VII. Information Regarding or 990-EZ) should cover the same period Employees Other Than Transfers To and Transactions as the Form 990, or Form 990-EZ, with and Relationships With which it is filed. Officers, Directors, and Noncharitable Exempt Trustees Organizations Penalties Index Complete Part I for the five employees Schedule A (Form 990 or 990-EZ) is with the highest annual compensation considered a part of Form 990, or Form over $50,000. Enter the number of other 990-EZ, for section 501(c)(3) employees with annual compensation organizations and section 4947(a)(1) over $50,000 who are not individually General Instructions nonexempt charitable trusts that are listed in Part I. Do not include employees required to file either form. Therefore, any listed in Part V of Form 990 or in Part IV Purpose of Form such organization that does not submit a of Form 990-EZ (List of Officers, Schedule A (Form 990 or 990-EZ) is used completed Schedule A (Form 990 or Directors, Trustees, and Key Employees). by: 990-EZ) with its Form 990, or Form Section 501(c)(3) organizations, and In columns (c) through (e), show all 990-EZ, does not satisfy its filing Section 4947(a)(1) nonexempt requirement and may be charged a $20 a cash and noncash forms of compensation charitable trusts. day penalty ($100 a day for large for each listed employee whether paid organizations). See General Instruction K currently or deferred. The organization These organizations must use of the Instructions for Form 990 and Form may also provide an attachment to Schedule A (Form 990 or 990-EZ) to 990-EZ for details on this and other explain the entire year 2004 furnish additional information not required penalties. compensation package for any person of other types of organizations that file listed in Part I. Form 990, Return of Organization Exempt To avoid having to respond to requests From Income Tax, or Form 990-EZ, Short for missing information, please be sure to: Column (c) Form Return of Organization Exempt Complete all applicable line items; Enter salary, fees, bonuses, and From Income Tax. Answer Yes or No to each question severance payments received by each on the return; Section 6033(b) and Rev. Proc , listed employee. Include current year Make an entry (including a zero when C.B. 587 require this additional payments of amounts reported or appropriate) on all total lines; and information. reportable as deferred compensation in Enter None or N/A if an entire part any prior year. Note: For purposes of these instructions, does not apply. the term section 501(c)(3) includes Column (d) organizations exempt under sections: Include in column (d) all forms of deferred compensation and future severance 501(e), Cooperative Hospital Service Specific Instructions payments (whether or not funded, Organizations, Attach separate sheets on which you whether or not vested, and whether or not 501(f), Cooperative Service follow the same format and sequence as the deferred compensation plan is a Organizations of Operating Educational on the printed form, if you need more qualified plan under section 401(a)). Organizations, space for any part or line item. Include in this column payments to Cat. No Q

2 welfare benefit plans on behalf of the Both the organization and its managers employee. Such plans provide benefits Part III. Statements About are subject to the tax on political such as medical, dental, life insurance, Activities expenditures under section severance pay, disability, etc. Reasonable estimates may be used if Line 1. If you checked Yes on this line, Line 2. See Part IV, Definitions, for the precise cost figures are not readily you must complete Part VI-A or VI-B and meaning of the term family member. available. provide the required additional Lines 2a through 2e. These lines apply information; otherwise, the return may be Unless the amounts are reported in to both sides of a listed transaction. considered incomplete. column (c), report as deferred Reporting is required, for example, compensation in column (d), salaries and Enter the total expenses paid or whether the exempt organization is a other compensation earned during the incurred in connection with the lobbying payer or payee, buyer or seller, lender or period covered by the return, but not yet activities described on line 1. The amount borrower. paid by the date the organization files its of expenses you enter should equal the Line 2d. Compensation or Repayment. return. amounts on line 38, Part VI-A, or line i, If the only compensation or repayment Part VI-B. If columns (a) and (b) of line 38 relates to amounts the organization Column (e) are both completed, enter both amounts reported in Part V of Form 990, or Part IV Enter in column (e) both taxable and separately. of Form 990-EZ, check Yes and write nontaxable fringe benefits (other than de Substantial part test. In general, a See Part V, Form 990, or See Part IV of minimis fringe benefits described in section 501(c)(3) organization may not Form 990-EZ, on the dotted line to the section 132(e)). Include expense left of the entry space. allowances or reimbursements that the devote a substantial part of its activities recipients must report as income on their to attempts to influence legislation. Under Line 3a. Scholarships, etc. The term separate income tax returns. Examples the substantial part test, if such an qualify in line 3a means that include: organization engages in substantial organizations or individuals will use the Amounts for which the recipient did not lobbying activities, the organization will funds the organization provides for account to the organization, lose both its tax-exempt status and its charitable purposes described in sections Allowances that were more than the ability to receive tax-deductible charitable 170(c)(1) and 170(c)(2). payee spent on serving the organization, contributions. Except for churches, certain church affiliated organizations, and The term qualify also means that and private foundations, an organization that individual recipients belong to a charitable Payments made in connection with loses its section 501(c)(3) status because class and the payments are to aid them. indemnification arrangements, the value it did not meet the substantial part test Examples include: of the personal use of housing, will owe an excise tax under section 4912 Helping the aged poor; automobiles, or other assets owned or on all of its lobbying expenditures. Training teachers and social workers leased by the organization (or provided Managers of the organization may also be from underdeveloped countries; and for the organization s use without charge), jointly and severally liable for this tax. Awarding scholarships to individuals. as well as any other taxable and nontaxable fringe benefits. Expenditure test. As an alternative See Pub. 525, Taxable and Nontaxable Line 3b. Section 403(b) Annuity Plan. to the substantial part test, eligible Income, for more information. Indicate whether you have a section public charities may elect the 403(b) annuity plan available for your expenditure test of section 501(h). The Part II. Compensation of employees. expenditure test generally permits higher the Five Highest Paid limits for lobbying expenditures than Line 4a. Check Yes to Line 4a if the allowed under the substantial part test. organization maintained separate Independent Contractors Electing public charities are subject to the accounts for any participating donor lobbying expenditure definitions of section for Professional Services 4911, which are generally more liberal did not make a contribution for that year Complete Part II for the five highest paid than the definitions under the substantial or the donor has not exercised his or her independent contractors (whether part test. Section 4911 applies only to right to make a suggestion on the individuals or firms) who performed public charities that made a valid section charitable use of funds in the account or during the tax year even though the donor personal services of a professional nature 501(h) election by filing Form 5768, its distribution for charity. for the organization and, in return, Election/Revocation of Election by an received over $50,000 for the year from Eligible Section 501(c)(3) Organization To Community foundations may maintain the organization. Examples of such Make Expenditures To Influence separate accounts for participating donors contractors include attorneys, Legislation. within the meaning of this question. accountants, doctors, and professional Electing public charities. If the Line 4b. Answer Yes to this question if fundraisers. organization is an electing public charity, the organization provides any of the Show also the number of other you must complete Part VI-A of this form. following types of credit counseling and/or independent contractors who received debt management activities: more than $50,000 for the year for Nonelecting public charities. If the Educating and/or counseling performing such services but who are not organization checked Yes but is not an consumers, in person, in writing, or using individually listed in Part II. electing public charity, you must complete electronic means; Part VI-B and attach a statement giving a Helping consumers consolidate debts; The organization may, at its discretion, detailed description of the organization s Negotiating with creditors on behalf of provide an attachment to explain the lobbying activities. consumers to lower interest rates, waive entire year 2004 compensation package fees, adjust balances, or restore for any person listed in Part II. All charities, both electing and acceptable credit ratings; Fundraising fees exceeding $50,000! nonelecting, are absolutely Offering, selling, or managing debt and/ should be reported in Part II, but not CAUTION prohibited from intervening in a or loan consolidation services and reimbursements for amounts paid by the political campaign for or against any programs or down payment assistance fundraiser to others for printing, paper, candidate for an elective public office. If a services; envelopes, postage, mailing list rental, charity does intervene in a political Acting as an escrow agent for debtors; etc. Part II is intended for the fee portion campaign, it will lose both its tax-exempt or of payments to contractors, not for any status and its eligibility to receive Participating in creditor Fair Share expense reimbursements. tax-deductible charitable contributions. arrangements. -2- Instructions for Schedule A (Form 990 or 990-EZ)

3 Part IV-A Disqualified person. A disqualified Part IV. Reason for Support does not include Line person is: Non-Private Foundation 1. A substantial contributor, who Any amounts an organization is Status receives from the exercise or a. Any person who gave an aggregate Definitions performance of its charitable, amount of more than $5,000, if that The following terms are used in more educational, or other purpose or amount is more than 2% of the total than one item in Part IV. The definitions function constituting the basis for its contributions the foundation or given below generally apply. exemption* organization received from its inception through the end of the year in which that Support (for lines 10, 11, and 12 of Any gain upon the sale or exchange of person s contributions were received. Part IV), with certain qualified exceptions property which would be considered b. The creator of a trust (without described below, means all forms of under any section of the Code as gain regard to the amount of contributions support including (but not limited to) from the sale or exchange of a capital received by the trust from the creator and other persons). Part IV-A asset. Any person who is a substantial Support includes Line contributor at any time generally remains Contributions of services for which a a substantial contributor for all future Gifts, grants, contributions, deduction is not allowable. periods even if later contributions by membership fees and 16 others push that person s contributions *Note: For organizations that checked the box below the 2% figure discussed above. on line 12, the amounts on line 17 of the Gifts from the contributor s spouse Any amounts an organization Support Schedule are included in support. are treated as gifts from the contributor. receives from the exercise or Gifts are generally valued at fair performance of its charitable, market value as of the date the educational, or other purpose or Support from a governmental unit, organization received them. function constituting the basis for its with certain exceptions described below, 2. An officer, director, or trustee of exemption* includes: the organization or any individual having powers or responsibilities similar to those Net income from unrelated Any amounts received from a of officers, directors, or trustees. business activities, whether or governmental unit, including donations or 3. An owner of more than 20% of the not such activities are carried contributions and amounts received in voting power of a corporation, profits on regularly as a trade or connection with a contract entered into interest of a partnership, or beneficial business and 19 with a governmental unit for the interest of a trust or an unincorporated performance of services or in connection enterprise that is a substantial contributor Gross investment income, such as with a government research grant, to the organization. interest, dividends, rents, provided these amounts are not excluded 4. A family member of an individual in from the term support as amounts the first three categories. A family and royalties received from exercising or performing member includes only a person s the organization s charitable purpose or spouse, ancestors, children, Tax revenues levied for the benefit of function. grandchildren, great grandchildren, and an organization and either paid to or An amount paid by a governmental the spouses of children, grandchildren, expended on behalf of such unit to an organization is not treated as and great grandchildren. organization; and received from exercising or performing its 5. A corporation, partnership, trust, or charitable, etc., purpose or function if the estate in which persons described in 1 The value of services or facilities payment is to enable the organization to through 4 above own more than 35% of (exclusive of those generally provide a service to, or maintain a facility the voting power, profits interest, or furnished to the public without for, the direct benefit of the public, as for beneficial interest. See section charge) furnished by a governmental example, to maintain library facilities that 4946(a)(1). unit referred to in Code section are open to the public. 170(c)(1) to an organization without Tax revenues levied for the Normally. An organization is considered organization s benefit and either paid to or normally to satisfy the public support charge expended on its behalf. test (for lines 10, 11, and 12 of the The value of services or facilities Support Schedule) for its current tax year *Note: The amounts on line 17 are included as (exclusive of services or facilities and the tax year immediately following its support only for those organizations that generally furnished, without charge, to the current tax year, if the organization checked the box on line 12. Otherwise, the public) furnished by a governmental unit satisfies the applicable support test for amounts on line 17 are not included in support. to the organization without charge. For the 4 tax years immediately before the example, a city pays the salaries of current tax year. personnel to guard a museum, art gallery, If the organization has a material etc., or provides the use of a building rent change (other than from unusual grants free. However, the term does not include see instructions for line 28) in its sources the value of any exemption from federal, of support during the current tax year, the state, or local tax or any similar benefit. data ordinarily required in the Support Indirect contributions from the general Schedule covering the years 2000 public. Indirect contributions are what through 2003 must be submitted for the the organization receives from other years 2000 through Prepare and organizations that receive a substantial attach a 5-year schedule using the same part of their support from general public format as provided in the Support contributions. An example is the Schedule for lines 15 through 28. organization s share of the proceeds from Lines 5 through 14. Reason for an annual community chest drive (such Non-Private Foundation Status. Check as the United Way or United Fund). one of the boxes on these lines to These are included on line 15. indicate the reason the organization is not Instructions for Schedule A (Form 990 or 990-EZ) -3-

4 a private foundation. The organization s research organization, based on the 4946(a)(1)(C) through (G) (and related exemption letter states this reason, or the circumstances involved. regulations) will be treated as if made by local IRS office can tell you. These tests are discussed in the donor. Line 6. School. Check the box on line 6 Regulations sections 1.170A-9(c)(2)(v) The 2% limitation does not apply to for a school whose primary function is the and (vi). Value the organization s assets support from governmental units referred presentation of formal instruction, and as of any day in its tax year but use the to in section 170(c)(1), or to contributions which regularly has a faculty, a same day every year. Value the from publicly supported organizations curriculum, an enrolled body of students, endowment at fair market value, using (section 170(b)(1)(A)(vi)), that check the and a place where educational activities commonly accepted valuation methods. box on their line 11a or 11b. are regularly conducted. (See Regulations section ) Example. X organization reported the A private school, in addition, must Line 10. Organization Operated for the following amounts in its Support Schedule have a racially nondiscriminatory policy Benefit of a Governmental Unit. Check for the 4-year period 2000 through 2003: toward its students. For details about the box on line 10 and complete the these requirements, see the instructions Support Schedule if the organization Line (e) Total for Part V. receives and manages property for and 15 Gifts, grants & contributions.. $300,000 expends funds to benefit a college or Line 7. Hospital or Cooperative university that is owned or operated by 17 Gross receipts from Hospital Service Organization. Check one or more states or their political admissions, etc ,000 the box on line 7 for an organization subdivisions. The school must be as whose main purpose is to provide hospital 18 Dividends & interest ,000 described in the first paragraph of the or medical care. A rehabilitation institution instructions for line Line 23 minus line ,000 or an outpatient clinic may qualify as a Expending funds to benefit a college or 26a 2% of line 24 (2% limitation).. 12,000 hospital, but the term does not include medical schools, medical research university includes acquiring and b Total of contributions organizations, convalescent homes, maintaining the campus, its buildings, and exceeding the 2% limitation.. 98,000 homes for the aged, or vocational training its equipment, granting scholarships and The X organization determined institutions for the handicapped. student loans, and making any other whether or not it met the section payments in connection with the normal Check the box on line 7 also for a 509(a)(1)/170(b)(1)(A)(vi) public support functions of colleges and universities. cooperative hospital service organization test as follows: The organization must meet described in section 501(e). essentially the same public support test Total support (line 24):... $600,000 Line 9. Hospital Medical Research described below for line 11. See Rev. Rul. Organization. Check the box on line 9 Direct Contributions: , C.B for a medical research organization Line 11. Organization Meeting the Total direct contributions from operated in connection with or in Section 509(a)(1) Public Support Test. persons who contributed less than conjunction with a hospital. The hospital Check either box (but not both) on line 2% of total support... 50,000 must be described in section 501(c)(3) or 11a or 11b and complete the Support Total direct contributions from six operated by the Federal Government, a Schedule to determine whether the donors, each of whom gave more state or its political subdivision, a U.S. organization meets the section 509(a)(1)/ than 2% ($12,000) of total support 170,000 possession or its political subdivision, or 170(b)(1)(A)(vi) public support test the District of Columbia. Indirect contributions from the described below. general public: Medical research means studies and The Support Schedule is completed for experiments done to increase or verify United Fund... 40,000 an organization that normally (see Part information about physical or mental IV, Definitions) receives at least 33 1 /3% of Grant from Y City... 40,000 diseases and disabilities and their its support (excluding income received in Total gifts, grants & contributions.. $300,000 causes, diagnosis, prevention, treatment, exercising its charitable, etc., function) or control. The organization must conduct from: Total direct contributions the research directly and continuously. If Direct or indirect contributions from the from six donors, each of it primarily gives funds to other general public; whom gave more than 2% organizations (or grants and scholarships Other publicly supported (section of total support...$170,000 to individuals) for them to do the 170(b)(1)(A)(vi)) organizations; or 2% limitation for six research, the organization is not a A governmental unit. donors: medical research organization. To determine whether the section (2% $600,000 6)... 72,000 Less: Direct contributions in excess of 2% of total support... 98,000 The organization is not required to be an affiliate of the hospital, but there must 509(a)(1)/170(b)(1)(A)(vi) test is met, donor contributions are considered be an understanding that there will be support from direct or indirect close and continuous cooperation in any contributions from the general public only Total public support ,000 joint-effort medical research. to the extent that the total amount Section 509(a)(1)/170(b)(1)(A)(vi) computation: Assets test/expenditure test. An organization qualifies as a medical 4-tax-year period is 2% or less of the Line 26c Total support... $600,000 research organization if its principal organization s total support for those 4 tax Line 26d Less total of lines: purpose is medical research, and it years as described below $300,000 devotes more than half its assets, or Any contribution by one individual will spends at least 3.5% of the fair market be included in full in the total support value of its endowment, in conducting denominator of the fraction determining 26b... 98,000 $398,000 medical research directly. the 33 1 /3%-of-support or the 10%-of-support limitation. Line 26e Total public support... $202,000 Either test may be met based on a Only the portion of each donor s computation period consisting of the Line 26f Public support contribution that is 2% or less of the total percentage (line 26e immediately preceding tax year or the support denominator will be included in divided by line 26c immediately preceding 4 tax years. the numerator. $202,000/ $600,000) % received from any one donor during the If an organization does not satisfy In applying the 2% limitation, all either the assets test or the expenditure contributions by any person(s) related to Since X organization received more test, it may still qualify as a medical the donor as described in section than 33 1 /3% of its total support for the -4- Instructions for Schedule A (Form 990 or 990-EZ)

5 period from public sources, it qualifies as characterize the amounts as gross Section 509(a)(2) computation: a section 509(a)(1)/170(b)(1)(A)(vi) investment income: Line publicly supported organization. Note that An organization that claims to be 27c Add: Amounts from column (e), if an organization fails the public support described in section 509(a)(3) because it lines 15, 16, 17, 20, and $120,000 test for 2 consecutive years, it loses its supports a section 509(a)(2) organization; public charity status and becomes a 27d Total of line 27a... $25,000 or private foundation. Total of line 27b... 20,000 45,000 A charitable trust, corporation, fund, or Facts and circumstances Public association described in section 501(c)(3) 27e Public support (line 27c minus support test. An organization that does (including a nonexempt charitable trust line 27d total)... $75,000 not qualify as publicly supported under described in section 4947(a)(1)), that is 27f Total support (line 23, the test described above may be publicly required to distribute, or normally column (e))...$200,000 supported on the basis of the facts in its distributes, at least 25% of its adjusted 27g Public support percentage (line case if it receives at least 10% of its net income (within the meaning of section 27e divided by line 27f support from the general public. If you 4942(f)) to a section 509(a)(2) $75,000/$200,000) % believe your organization is publicly organization, if the distribution normally 27h Investment income percentage (line 18 divided by line 27f supported according to applicable comprises at least 5% of the distributee $80,000/$200,000) % regulations, attach a detailed statement of organization s adjusted net income. the facts upon which you base your T organization received 37.50% of its conclusion. If an organization receives an amount total support from the public and thus met Line 12. Organization Meeting the from a split-interest trust described in the more-than-one-third test of public Section 509(a)(2) Public Support Tests. section 4947(a)(2) that is required to support to total support. T organization s Check the box on line 12 and complete distribute, or normally distributes, at least investment income percentage was the Support Schedule to determine 25% of its adjusted net income to a 40.0%. Therefore, it did not meet the whether an organization meets both of section 509(a)(2) organization, and the second part of the section 509(a)(2) the following section 509(a)(2) support distribution normally comprises at least test the not-more-than-one-third of total tests: 5% of the distributee organization s support from gross investment income adjusted net income, the amount retains and net unrelated business taxable 1. The organization normally receives the character of gross investment income income. more than one-third of its support for each if it would be characterized as gross tax year from: Since T organization did not satisfy investment income attributable to Persons other than disqualified both of the one-third tests of section transfers in trust after May 26, 1969, if the persons (see Part IV, Definitions) with 509(a)(2), it failed the section 509(a)(2) trust were a private foundation. respect to the organization, public support test for this year. An Governmental units (described in organization that fails the public support section 170(c)(1)), or All income characterized under the test for 2 consecutive years loses its Organizations described in section rules above as gross investment income public charity status and becomes a 170(b)(1)(A) (other than in clauses (vii) in the possession of the distributing private foundation. and (viii)), and organization is considered to be Line 13. Supporting Organization. Such support is received by the distributed first by the organization and Check the box on line 13 and complete organization from any combination of: keeps its character as such in the columns (a) and (b) for a supporting possession of the recipient. Gifts, grants, contributions, or organization operated only for the benefit membership fees, and of and in connection with organizations Gross receipts from admissions, For more details, see Regulations listed in lines 5 through 12, or with sales of merchandise, performance of section 1.509(a)-5 that covers special organizations described in section services, or furnishing of facilities, in an rules of attribution. 501(c)(4), (5), or (6) that meet the tests of activity that is not an unrelated trade or section 509(a)(2) (described in line 12). business (within the meaning of section If the organization received any General principles governing supporting 513). amounts from either kind of organization organizations are described in Gross receipts, in any tax year, do not above, attach a statement. Show the Regulations section 1.509(a)-4. include receipts from any person, bureau, amounts received from each organization, For column (b), identify the or similar agency of a government unit including amounts, such as gifts, that are organization supported if it is included in (described in section 170(c)(1)) to the not investment income. lines 5 through 12. For example, if your extent such receipts exceed the greater of organization supported a hospital, enter $5,000 or 1% of the organization s Example. T organization reported the 7 in column (b). support in such tax year. following amounts in its Support Schedule 2. The organization normally receives Line 14. Organization Operated to Test for the 4-year period 2000 through 2003: not more than one-third of its support for Public Safety. Check the box on line each tax year from the sum of: 14 only if the organization has received a Line (e) Total ruling from the IRS that it is organized Gross investment income (as 15 Gifts, grants & contributions.. $45,000 and operated primarily to test for public defined in section 509(e)), and safety. The excess (if any) of the amount of 16 Membership fees... 50,000 the unrelated business taxable income 17 Gross receipts from (as defined in section 512) over the Part IV-A. Support admissions, merchandise, etc. 25,000 amount of the tax imposed by section Schedule Gross income from interest, dividends, etc ,000 Complete the Support Schedule if a box on line 10, 11, or 12 was checked. Gross investment income. When 23 Total of lines 15 through 22.. $200,000 determining whether an organization Note: The Support Schedule must be 27a Gifts from disqualified persons $25,000 meets the gross investment income test completed on the cash method of of section 509(a)(2)(B), amounts received b Excess gross receipts from accounting. from the following organizations retain the nondisqualified persons... $20,000 For example, if a grantor makes a character of gross investment income T organization determined whether or grant to an organization payable over a (rather than gifts or contributions) to the not it met the one-third tests of section term of years, such grant will be includible extent that these organizations 509(a)(2) in the following computation: in the support fraction of the grantee Instructions for Schedule A (Form 990 or 990-EZ) -5-

6 organization only when and to the extent Raffles, bingo, or return.) Enter the sum of such amounts amounts payable under the grant are Fundraising events, income from which for each year. An example of such a list received by the grantee. is not taxable as unrelated business for line 27a is given below. If the organization uses the accrual income because method of accounting, a worksheet such Substantially all the work is performed Line 27a Example as the one that follows may be used to without compensation, or Carried on by the organization (a) (b) (c) (d) (e) (f) convert any revenue account from an primarily for the convenience of its Name Total accrual basis to a cash basis. members, or Worksheet to convert a revenue Consists of the selling of David $7,000 $6,000 $13,000 account from the accrual to the cash merchandise, substantially all of which Smith basis has been received by the organization as gifts or contributions (section 513(a)(1), Anne $5,000 $7,000 $12,000 (2), or (3)). Parker 1. Revenue per books (accrual basis)... Line 26b. Contributions in Excess of the 2% Limitation. Prepare a list for your Total $7,000 $6,000 $5,000 $7,000 $25, Add: files to show the name of and amount contributed by each person (other than a Enter the total for each year of columns (b) a. Beginning-of-year entry through (e) on line 27a, 2004 Schedule A (Form (if any) reversing accrual of governmental unit or publicly supported 990 or 990-EZ). income at the end of the organization) whose total gifts for 2000 prior year; and... through 2003 exceeded the amount Enter the total of column (f) on the line 27a shown in line 26a. (Do not file this list with entry space for line 27d, 2004 Schedule A b. Any amounts collected your return.) Enter the total of all these (Form 990 or 990-EZ). during the year that were not credited to the revenue excess amounts on line 26b. An example account in the current year of such a list for line 26b is given below. Line 27b. Gross Receipts From Other 3. Subtotal... Line 27a. Contributions, Membership Than Disqualified Persons. For any Fees, and Gross Receipts From amount included in line 17 that was 4. Less: Disqualified Persons. For amounts received from each person (other than Income accrued during the included in lines 15, 16, and 17 that were disqualified persons ) prepare a list for current year but not received from a disqualified person, your records to show the name of, and collected as of the end of prepare a list for your records to show the amount received for each year, that was the year... name of, and total amounts received in more than the larger of: each year from each disqualified 1. The amount on line 25 for 5. Revenue on a cash basis person. (Do not file this list with your the year, or If the organization has not existed during the whole period the Support Line 26b Example Schedule covers, fill in the information for the years that apply. If the organization s Amount on line 26a of 2004 Schedule A (2% limitation)... $12,000 status is based on years not shown in the Contributors whose total gifts from 2000 through 2003 were in excess of the Support Schedule, attach an additional 2% limitation schedule for the other years. Lines 15, 16, 17, 26, and 27. See (a) (b) (c) (d) (e) (f) (g) Part IV, Definitions. See also Regulations Name Total Excess section 1.509(a)-3 for the: contributions 1. Distinction between gross receipts from gifts and contributions, grants, and (col. (f) less gross investment income, and the 2. Definition of membership fees and 2% a bureau or similar agency of a governmental unit. limitation) Note: Organizations completing line 26 should note the instructions and XYZ Foundation $59,000 $ 3,000 $62,000 $50,000 examples for lines 10 or 11 regarding the public support test applicable to their type Apple Office of organization. Organizations completing line 27 Supply $12,000 3,000 15,000 3,000 should note the instructions and Plum 15,000 15,000 30,000 18,000 examples for line 12 for guidance in Corporation computing their public support test. Line 17. Gross Receipts From Activities Related to Organization s Charitable, etc., Purpose. Include income generated by the organization s exempt function activities (charitable, John Smith Sue Adams 5,000 $5,000 10,000 5,000 1,000 10,000 16,000 20,000 4,000 8,000 educational, etc.) and by its nontaxable fundraising events (excluding any Apple Trade contributions received, which are reported Assoc. on line 15). 20,000 7,000 27,000 15,000 Examples include income from: Total (Carry the total of column (g) to line 26(b) of the 2004 Schedule Ticket sales to performances by a A (Form 990 or 990-EZ)). $98,000 symphony orchestra, -6- Instructions for Schedule A (Form 990 or 990-EZ)

7 2. $5,000. Line 28 Example solicitation program, during the school s After computing the difference between registration period. Where more than one Year 2003 Description community is served by a school, the the amount received and the larger school may publish its notice in those amount described in 1 or 2, enter the sum Name Mr. Disinterested Undeveloped newspapers that are reasonably likely to of these differences (the excess amounts) Donor land be read by all racial segments of the for each year. An example of such a list (Volume communities that it serves. The notice for line 27b is given below for the year Date of Grant January 15, 578, page must appear in a section of the 2003 entry line. Prepare similar lists to 2003 xxx, Dept. of newspaper likely to be read by determine excess amounts for the other Land prospective students and their families entry lines of 27b. (Do not file these lists Records, and it must occupy at least three column with your return.) Jefferson inches. It must be captioned in at least 12 County, point boldface type as a notice of Line 27b Example Ohio) nondiscriminatory policy as to students, Amount of Grant $6,000 Year 2003 and its text must be printed in at least 8 point type. The following notice will be (a) (b) (c) (d) (e) Name Amount Amount Enter Year Part V. Private School acceptable: received on the (2003) in line 25 larger Excess Questionnaire Notice Of Nondiscriminatory Policy (2003) for of (column All schools that checked the box on As To Students (2003) column (b) less line 6, Part IV, must complete Part V. (c) or column Relevant parts of Rev. Proc , $5000 (d)) C.B. 587 are given below. The The (name) school admits revenue procedure gives guidelines and students of any race, color, recordkeeping requirements for national and ethnic origin to all Word Processing, determining whether private schools that the rights, privileges, programs, Inc. $25,000 $2,000 $5,000 $20,000 are recognized as exempt from tax have and activities generally accorded racially nondiscriminatory policies toward or made available to students at their students. the school. It does not Enter the total for column (e) on line 27b for the year (2003) entry space.. $20, Organizational requirements. A discriminate on the basis of race, school must include a statement in its color, national and ethnic origin in charter, bylaws, or other governing administration of its educational Line 28. Unusual Grants. Unusual instrument, or in a resolution of its policies, admissions policies, grants generally are substantial governing body, that it has a racially scholarship and loan programs, contributions and bequests from nondiscriminatory policy as to students and athletic and other disinterested persons and are and therefore does not discriminate school-administered programs. 1. Attracted because of the against applicants and students on the organization s publicly supported nature, basis of race, color, and national or ethnic 2. Unusual and unexpected because origin. (b) The school may use the broadcast of the amount, and 4.02 Statement of policy. Every media to publicize its racially school must include a statement of its nondiscriminatory policy if this use makes 3. Large enough to endanger the racially nondiscriminatory policy as to such nondiscriminatory policy known to all organization s status as normally meeting students in all its brochures and segments of the general community the the support test described in the catalogues dealing with student school serves. If this method is chosen, instructions for lines 10, 11, and 12. admissions, programs, and scholarships. the school must provide documentation A statement substantially similar to the that the means by which this policy was A grant that meets these terms may be Notice described in paragraph (a) of communicated to all segments of the treated as an unusual grant (that is subsection 1 of section 4.03, infra, will be general community was reasonably disregarded entirely in the public support acceptable for this purpose. Further, expected to be effective. In this case, computation) even if the organization every school must include a reference to appropriate documentation would include receives the funds over a period of years. its racially nondiscriminatory policy in copies of the tapes or script used and In the list of unusual grants, show only other written advertising that it uses as a records showing that there was an what the organization received during the means of informing prospective students adequate number of announcements, that year. of its programs. The following references they were made during hours when the will be acceptable: announcements were likely to be Do not treat gross investment income The (name) school admits students of communicated to all segments of the items as unusual grants. Instead, include any race, color, and national or ethnic general community, that they were of all investment income in support. origin. sufficient duration to convey the message clearly, and that they were broadcast on See Rev. Rul , C.B Publicity. The school must make its racially nondiscriminatory policy known radio or television stations likely to be and Regulations sections to all segments of the general community listened to by substantial numbers of 1.170A-9(e)(6)(ii) and 1.509(a)-3(c)(3) served by the school. members of all racial segments of the and (4) for details about unusual grants. general community. Announcements 1. The school must use one of the must be made during the period of the For an organization described in lines following two methods to satisfy this school s solicitation for students or, in the 10, 11, or 12 that received any unusual requirement: absence of a solicitation program, during grants during 2000 through 2003, prepare (a) The school may publish a notice of the school s registration period. a list for your records to show, for each its racially nondiscriminatory policy in a year, the name of the contributor, the date newspaper of general circulation that Communication of a racially and amount of the grant, and a brief serves all racial segments of the nondiscriminatory policy as to students by description of the grant. (Do not file this community. This publication must be a school to leaders of racial groups as the list with your return.) Do not include these repeated at least once annually during the sole means of publicity generally will not grants in line 15. An example for such a period of the school s solicitation for be considered effective to make the policy list for line 28 is given below. students or, in the absence of a known to all segments of the community. Instructions for Schedule A (Form 990 or 990-EZ) -7-

8 2. The requirements of subsection 1 of school. The Service recognizes that the 4.06 Certification. An individual this section will not apply when one of the failure by a school drawing its students authorized to take official action on behalf following paragraphs applies: from local communities to enroll racial of a school that claims to be racially (a) If for the preceding 3 years the minority group students may not nondiscriminatory as to students is enrollment of a parochial or other necessarily indicate the absence of a required to certify annually, under church-related school consists of students racially nondiscriminatory policy as to penalties of perjury, that to the best of his at least 75% of whom are members of the students when there are relatively few or or her knowledge and belief the school sponsoring religious denomination or unit, no such students in these communities. has satisfied the applicable requirements the school may make known its racially Actual enrollment is, however, a of sections 4.01 through 4.05 of the Rev. nondiscriminatory policy in whatever meaningful indication of a racially Proc. This certification is line 35 in Part V. newspapers or circulars the religious nondiscriminatory policy in a community in which a public school or schools 4.07 Faculty and staff. The existence denomination or unit utilizes in the became subject to a desegregation order of a racially discriminatory policy with communities from which the students are of a federal court or otherwise expressly respect to employment of faculty and drawn. These newspapers and circulars became obligated to implement a administrative staff is indicative of a may be those distributed by a particular desegregation plan under the terms of racially discriminatory policy as to religious denomination or unit or by an any written contract or other commitment students. Conversely, the absence of association that represents a number of to which any Federal agency was a party. racial discrimination in employment of religious organizations of the same faculty and administrative staff is denomination. If, however, the school The Service encourages schools to indicative of a racially nondiscriminatory advertises in newspapers of general satisfy the publicity requirement by the policy as to students. circulation in the community or methods described in subsection 1 of this communities from which its students are section, regardless of whether a school 7.01 Specific records. Except as drawn and paragraphs (b) and (c) of this considers itself within subsection 2, provided in section 7.03, each exempt subsection are not applicable to it, then it because it believes these methods to be private school must maintain for a must comply with paragraph (a) of the most effective to make known a minimum period of three years, beginning subsection 1 of this section. school s racially nondiscriminatory policy. with the year after the year of compilation (b) If a school customarily draws a In this regard it is each school s or acquisition, the following records for substantial percentage of its students responsibility to determine whether the use of the Service on proper request: nationwide or worldwide or from a large paragraph (a), (b), or (c) of subsection 2 1. Records indicating the racial geographic section or sections of the applies to it. On audit, a school must be composition of the student body, faculty, United States and follows a racially prepared to demonstrate that the failure and administrative staff for each nondiscriminatory policy as to students, to publish its racially nondiscriminatory academic year. the publicity requirement may be satisfied policy in accordance with subsection 1 of this section was justified by the 2. Records sufficient to document that by complying with section 4.02, supra. application to it of paragraph (a), (b), or scholarship and other financial assistance Such a school may demonstrate that it (c) of subsection 2. Further, a school is awarded on a racially nondiscriminatory follows a racially nondiscriminatory policy must be prepared to demonstrate that it basis. within the meaning of the preceding has publicly disavowed or repudiated any 3. Copies of all brochures, sentence either by showing that it statements purported to have been made catalogues, and advertising dealing with currently enrolls students of racial on its behalf (after November 6, 1975) student admissions, programs, and minority groups in meaningful numbers that are contrary to its publicity of a scholarships. Schools advertising or, when minority students are not racially nondiscriminatory policy as to nationally or in a large geographic enrolled in meaningful numbers, that its students, to the extent that the school or segment or segments of the United promotional activities and recruiting its principal official were aware of such States need only maintain a record efforts in each geographic area were statements. sufficient to indicate when and in what reasonably designed to inform students of publications their advertisements were all racial segments in the general 4.04 Facilities and programs. A placed. communities within the area of the school must be able to show that all of its availability of the school. The question programs and facilities are operated in a 4. Copies of all materials used by or whether a school satisfies the preceding racially nondiscriminatory manner. on behalf of the school to solicit sentence will be determined on the basis contributions Scholarship and loan of the facts and circumstances of each programs. As a general rule, all case. scholarship or other comparable benefits 7.02 Limitation. (c) If a school customarily draws its procurable for use at any given school 1. For purposes of section 7.01, the students from local communities and must be offered on a racially racial composition of the student body, follows a racially nondiscriminatory policy nondiscriminatory basis. Their availability faculty, and administrative staff may be as to students, the publicity requirement on this basis must be known throughout an estimate based on the best information may be satisfied by complying with the general community being served by readily available to the school, without section 4.02, supra. Such a school may the school and should be referred to in requiring student applicants, students, demonstrate that it follows a racially the publicity required by this section in faculty, or administrative staff to submit nondiscriminatory policy within the order for that school to be considered information to the school that the school meaning of the preceding sentence by racially nondiscriminatory as to students.. otherwise does not require. For each showing that it currently enrolls students.. [S]cholarships and loans that are made academic year, however, a record of the of racial minority groups in meaningful pursuant to financial assistance programs method by which racial composition is numbers. The question whether a school favoring members of one or more racial determined must be maintained.... satisfies the preceding sentence will be minority groups that are designed to 2. The Service does not require that a determined on the basis of the facts and promote a school s racially school release personally identifiable circumstances of each case. One of the nondiscriminatory policy will not adversely records or personal information contained facts and circumstances that the Service affect the school s exempt status. therein except in accordance with the will consider is whether the school s Financial assistance programs favoring requirements of the Family Educational promotional activities and recruiting members of one or more racial groups Rights and Privacy Act of 1974, 20 efforts in each area were reasonably that do not significantly derogate from the U.S.C. section 1232g (1974). Similarly, designed to inform students of all racial school s racially nondiscriminatory policy the Service does not require a school to segments in the general communities similarly will not adversely affect the keep records the maintenance of which is within the area of the availability of the school s exempt status. prohibited under state or federal law. -8- Instructions for Schedule A (Form 990 or 990-EZ)

9 7.03 Exceptions. The records 1. The total amount paid or incurred Grassroots lobbying communications described in section 7.01 need not be for religious, charitable, scientific, literary, ( grassroots expenditures ). A independently maintained for Internal or educational purposes, or for the grassroots lobbying communication is any Revenue Service use if: prevention of cruelty to children or attempt to influence any legislation 1. Substantially the same information animals, or to foster national or through an attempt to affect the opinions that each of these records would provide international amateur sports competition of the general public or any part of the has been included in a report or reports (not including providing athletic facilities general public. filed in accordance with law with an or equipment, other than by qualified A communication is generally not a agency or agencies of Federal, state, or amateur sports organizations described in grassroots lobbying communication local government, and this information is section 501(j)(2)), unless (in addition to referring to specific current within one year, and 2. The allocable portion of legislation and reflecting a view on that 2. The school maintains copies of administrative expenses paid or incurred legislation) it encourages recipients to these reports from which this information for the above purposes, take action about the specific legislation. is readily obtainable. Records described 3. Amounts paid or incurred to try to A communication encourages a in section 7.01 providing information not influence legislation, whether or not for recipient to take action when it: included in reports filed with an agency or the purposes described in 1 above, agencies must be maintained by the 4. Allowance for depreciation or (1) States that the recipient should school for Service use. amortization, and contact legislators; 5. Fundraising expenditures, except 7.04 Failure to maintain records. that exempt purpose expenditures do not (2) States a legislator s address, phone Failure to maintain or to produce upon the include amounts paid to or incurred for number, etc.; proper request the required records and either the organization s separate information will create a presumption that fundraising unit or other organizations, if (3) Provides a petition, tear-off the organization has failed to comply with the amounts are primarily for fundraising. postcard, or similar material for the these guidelines. recipient to send to a legislator; or See also Regulations section Part VI-A. Lobbying (c) for a discussion of excluded (4) Specifically identifies one or more Expenditures by Electing expenditures. legislators who: Will vote on legislation; Public Charities Lobbying expenditures. The term Opposes the communication s view on lobbying expenditures means Complete Part VI-A only for an eligible the legislation; expenditures paid or incurred for the organization that elected to be subject to Is undecided about the legislation; purpose of attempting to influence the lobbying expenditure limitations of Is the recipient s representative in the legislation: section 501(h) by filing Form 5768 and for legislature; or which the election was valid and in effect Is a member of the legislative Through communication with any for its tax year beginning in the year committee that will consider the member or employee of a legislative A public charity that makes a valid legislation. body, or with any government official or section 501(h) election may spend up to a employee who may participate in the A communication described in (4) certain percentage of its exempt purpose formulation of the legislation, and above generally is grassroots lobbying expenditures to influence legislation By attempting to affect the opinions of only if, in addition to referring to and without incurring tax or losing its the general public. reflecting a view on specific legislation, it tax-exempt status. is a communication that cannot meet the To determine if an organization has Expenditure test. Under the full and fair exposition test as spent excessive amounts on lobbying, expenditure test, there are limits both nonpartisan analysis, study, or research. you must know which expenditures are upon the amount of the organization s Communication with members. For lobbying expenditures and which are not grassroots lobbying expenditures and purposes of section 4911, expenditures lobbying expenditures. An electing public upon the total amount of its direct for certain communications between an charity s lobbying expenditures for a year lobbying and grassroots lobbying organization and its members are treated are the sum of its expenditures during expenditures. If the electing public charity more leniently than are communications that year for (1) direct lobbying does not meet this expenditure test, it to nonmembers. Expenditures for a communications ( direct lobbying will owe a section 4911 excise tax on its communication that refers to, and reflects expenditures ) plus (2) grassroots excess lobbying expenditures. Moreover, a view on, specific legislation are not lobbying communications ( grassroots if over a 4-year averaging period the lobbying expenditures if the expenditures ). organization s average annual total communication satisfies the following lobbying or grassroots lobbying Direct lobbying communications requirements: expenditures are more than 150% of its ( direct lobbying expenditures ). A 1. The communication is directed only dollar limits, the organization will lose its direct lobbying communication is any to members of the organization, exempt status. attempt to influence any legislation 2. The specific legislation the The following terms are used in Part through communication with any: communication refers to, and reflects a VI-A. See Regulations section for Member or employee of a legislative view on, is of direct interest to the details. body, or organization and its members, Exempt purpose expenditures. The Government official or employee (other 3. The communication does not amount an electing public charity may than a member or employee of a directly encourage the member to engage spend on lobbying (without incurring tax) legislative body) who may participate in in direct lobbying (whether individually or is a scaled percentage of the the formulation of the legislation, but only through the organization), and organization s exempt purpose if the principal purpose of the 4. The communication does not expenditures. In general, an expenditure communication is to influence legislation. directly encourage the member to engage is an exempt purpose expenditure if it is in grassroots lobbying (whether A communication with a legislator or paid or incurred by an electing public individually or through the organization). government official will be treated as a charity to accomplish the organization s direct lobbying communication, if, but only Expenditures for a communication exempt purpose. if, the communication: directed only to members that refers to, In general, exempt purpose Refers to specific legislation, and and reflects a view on, specific legislation expenditures are: Reflects a view on such legislation. and that satisfies the requirements of Instructions for Schedule A (Form 990 or 990-EZ) -9-

10 paragraphs 1, 2, and 4, but does not to the other organization s governing national legislation expenditures of the satisfy the requirements of paragraph 3, board to cause or prevent action on affiliated organizations. are treated as expenditures for direct legislative issues (interlocking Do not charge the controlling lobbying. directorate). organization with other lobbying Expenditures for a communication If you are not sure whether your group expenditures (or other exempt-purpose directed only to members that refers to, is affiliated, you may ask the IRS for a expenditures) of the affiliated and reflects a view on, specific legislation ruling letter. There is a fee for this ruling. organizations, and and satisfies the requirements of Treat each local organization as though For Information on requesting rulings, paragraphs 1 and 2, but does not satisfy it were not a member of an affiliated see Rev. Proc , I.R.B the requirements of paragraph 4, are group; i.e., the local organization should treated as grassroots expenditures, Members of an affiliated group account for its own expenditures only and whether or not the communication measure both lobbying expenditures and not any of the national legislation satisfies the requirements of paragraph 3. permitted lobbying expenditures on the expenditures deemed as incurred by the basis of the affiliated group s tax year. If controlling organization. See Regulations section for all members of the affiliated group have details. When this type of limited control is the same tax year, that year is the tax There are special rules regarding present, each member of the affiliated year of the affiliated group. certain paid mass media advertisements group should complete column (b) only. However, if the affiliated group s about highly publicized legislation; Group returns. Although membership members have different tax years, the tax allocation of mixed purpose expenditures; in a group affiliated for lobbying does not year of the affiliated group is the calendar certain transfers treated as lobbying establish eligibility to file a group return, a year, unless all the members of the group expenditures and special rules regarding group return can sometimes meet the elect otherwise. See Regulations section lobbying on referenda, ballot initiatives, filing requirements of more than one (e)(3). and similar procedures (see Regulations member of an affiliated group. (General sections and -3). If the electing organization belongs to Instruction R of the Instructions for Form an affiliated group, complete in Part VI-A, Legislation. In general, the term 990 and Form 990-EZ explains who may lines 36 through 44: legislation includes Acts, bills, file a group return.) Column (a) for the affiliated group as a resolutions, or similar items. Specific If a central or parent organization files whole, and legislation includes both legislation that a group return on behalf of two or more Column (b) for the electing member of has already been introduced in a members of the group, complete the group. legislative body and a specific legislative column (a), Part VI-A, for the affiliated proposal that the organization either If there are no excess lobbying group as a whole. Include the central, supports or opposes. expenditures on either line 43 or 44 of electing, and nonelecting members. Exceptions to the definitions of direct column (a), treat each electing member as having no excess lobbying In column (b), except on lines 43 and lobbying communication and/or expenditures. 44, include the amounts that apply to all grassroots lobbying communication. electing members of the group if they are In general, engaging in nonpartisan However, if there are excess lobbying included in the group return. analysis, study, or research and making expenditures on either line 43 or 44 of column (a), treat each electing member Attach the schedule described above its results available to the general public as having excess lobbying expenditures. under Affiliated groups. Show what or segment or members thereof, or to In such case, each electing member must amounts apply to each group member. governmental bodies, officials, or employees is not considered either a file Form 4720, Return of Certain Excise If the group return includes direct lobbying communication or a Taxes on Charities and Other Persons organizations that belong to more than grassroots lobbying communication. Under Chapters 41 and 42 of the Internal one affiliated group, show in column (a) Nonpartisan analysis, study, or research Revenue Code, and must pay the tax on the totals for all such groups. On the may advocate a particular position or its proportionate share of the affiliated attached schedule, show the amounts viewpoint as long as there is a sufficiently group s excess lobbying expenditures. that apply to each affiliated group and to full and fair exposition of the pertinent To find a member s proportionate each group member. facts to enable the public or an individual share, see Regulations section If the parent organization has made to form an independent opinion or (d). Enter the proportionate the lobbying expenditure election, its conclusion. share in column (b) on line 43 or line 44, separate return must also show in column A communication that responds to a or on both lines. (a) the amounts that apply to the affiliated governmental body s or committee s Attached schedule. Attach a group as a whole and, in column (b), the written request for technical advice is not schedule showing each affiliated group amounts that apply to the parent a direct lobbying communication. member s name, address, EIN, and organization only. A communication is not a direct expenses. Use the format of Part VI-A for A subordinate organization not lobbying communication if the this schedule. Show which members included in the group return would also communication is an appearance before, elected and which did not. complete column (a) for the affiliated or communication with, any legislative Include each electing member s share group as a whole and column (b) for itself body whose action might affect the of the excess lobbying expenditures on only. organization s existence, its powers and the attached schedule. Nonelecting However, if limited control (defined duties, its tax-exempt status, or the members do not owe tax, but remain above) exists, complete only column (b) deductibility of contributions to the subject to the general rule, which in Part VI-A of the group return for the organization, as opposed to affecting provides that no substantial part of their electing members in the group. merely the scope of the organization s activities may consist of carrying on future activities. Attach a schedule to show the propaganda or otherwise trying to amounts that apply to each electing Affiliated groups. Treat members of an influence legislation. member. affiliated group as a single organization to Limited control. If two organizations measure lobbying expenditures and In the separate returns filed by the are affiliated because their governing permitted lobbying expenditures. parent and by any subordinate instruments provide that the decisions of organizations not included in the group Two organizations are affiliated if one one will control the other only on national return, complete only column (b). is bound by the other organization s legislation, apply expenditures as follows: decisions on legislative issues (control) or Charge the controlling organization with Lines 36 through 44. Complete if enough representatives of one belong its own lobbying expenditures and the column (b) for any organization using Part -10- Instructions for Schedule A (Form 990 or 990-EZ)

11 VI-A but complete column (a) only for statement, show the ending date of the (e.g., even lobbying activities carried out affiliated groups. tax year in which the organization made by unreimbursed volunteers). Use lines 36 through 44 to determine its first section 501(h) election and state For example, the activities should be whether any of the organization s current whether or not that first election was included in the attached statement if an year lobbying expenditures are subject to revoked before the start of the organization (either through its employees tax. File Form 4720 if you need to report organization s tax year that began in or volunteers) attempts to influence and pay the excise tax legislation in any of the following ways: Lines 45 through 50. Lines 45 Note. If the organization belongs to an affiliated group, enter the appropriate Sending letters or publications to through 50 are used to determine if the affiliated group totals from column (a), government officials or legislators, organization exceeded lobbying lines 36 through 44, when completing Meeting with or calling government expenditure limits during the 4-year lines 45, 47, 48, and 50. officials or legislators, averaging period. Sending or distributing letters or Any organization for which a lobbying Line 45. Lobbying nontaxable publications (including newsletters, expenditure election under section 501(h) amount. For 2001 through 2004, enter brochures, etc.) to members or to the was in effect for its tax year beginning in the amount from line 41 of the general public, or 2004 must complete columns (a) through Schedule A (Form 990 or 990-EZ) filed for Using direct mail, placing (e) of lines 45 through 50 except in the each year. advertisements, issuing press releases, following situations. Line 47. Total lobbying holding news conferences, or holding 1. An organization first treated as a expenditures. For 2001 through 2004, rallies or demonstrations. section 501(c)(3) organization in its tax enter the amount from line 38 of the year beginning in 2004 does not have to Schedule A (Form 990 or 990-EZ) filed for Part VII. Information complete any part of lines 45 through 50. each year. Line 48. Grassroots nontaxable Regarding Transfers To 2. An organization does not have to complete lines 45 through 50 for any amount. For 2001 through 2004, enter and Transactions and period before it is first treated as a section the amount from line 42 of the 501(c)(3) organization. Schedule A (Form 990 or 990-EZ) filed for Relationships With 3. If 2004 is the first year for which an each year. Noncharitable Exempt organization s first section 501(h) election Line 50. Grassroots lobbying is effective, that organization must Organizations expenditures. For 2001 through 2004, complete line 45, columns (a) and (e). enter the amount from line 36 of the Part VII is used to report direct and The organization must then complete Schedule A (Form 990 or 990-EZ) filed for indirect transfers to (line 51a), direct and all of column (e) to determine whether the each year. indirect transactions with (line 51b), and amount on line 47, column (e), is equal to relationships with (line 52) any other or less than the lobbying ceiling amount Part VI-B. Lobbying noncharitable exempt organization calculated on line 46 and whether the (section 6033(b)(9)). amount on line 50 is equal to or less than Activity by Nonelecting A noncharitable exempt organization the grassroots ceiling amount calculated Public Charities is an organization exempt under section on line 49. The Part VI-A instructions defining direct 501(c) (that is not exempt under section The organization does not satisfy both and grassroots lobbying activities by 501(c)(3)), or a political organization tests if either its total lobbying organizations that made the section described in section 527. expenditures or grassroots lobbying 501(h) election do not apply to For purposes of these instructions, the expenditures exceed the applicable nonelecting organizations that complete section 501(c)(3) organization completing ceiling amounts. When this occurs, all five Part VI-B. this Schedule A (Form 990 or 990-EZ) is columns must be completed and a Part VI-B provides a reporting format referred to as the reporting organization. recomputation made unless exception 1 or 2 above applies. for any organization that engaged in A noncharitable exempt organization is 4. If 2004 is the second or third tax lobbying activities in its 2004 tax year but related to or affiliated with the reporting year for which the organization s first did not make a section 501(h) lobbying organization if: section 501(h) election is in effect, that expenditure election for that year by filing 1. The two organizations share some organization is required to complete only Form element of common control, or the columns for the years in which the A nonelecting public charity will 2. A historic and continuing election has been in effect, entering the generally be regarded as lobbying if the relationship exists between the two totals for those years in column (e). organization either: (1) contacts, or urges organizations. The organization must determine, for the public to contact, members of a those 2 or 3 years, whether the amount legislative body for the purpose of A noncharitable exempt organization entered in column (e), line 47, is equal to proposing, supporting, or opposing is unrelated to the reporting organization or less than the lobbying ceiling amount legislation or the government s budget if: reported on line 46, and whether the process; or (2) advocates the adoption or 1. The two organizations share no amount entered in column (e), line 50, is rejection of legislation. element of common control, and equal to or less than the grassroots Nonelecting organizations must 2. A historic and continuing ceiling amount calculated on line 49. complete Part VI-B to show lobbying relationship does not exist between the The organization does not satisfy both expenditures paid or incurred. two organizations. tests if either its total lobbying In item g, direct contact means a expenditures or grassroots lobbying An element of common control is personal telephone call or visit expenditures exceed applicable ceiling! present when one or more of the officers, CAUTION with legislators, their staffs, or amounts. When that occurs, all five directors, or trustees of one organization government officials. columns must be completed and a are elected or appointed by the officers, recomputation made, unless exception 1 These nonelecting organizations must directors, trustees, or members of the or 2 above applies. also attach a statement giving a detailed other. An element of common control is description of their lobbying activities. The also present when more than 25% of the If the organization is not required to detailed description of lobbying activities officers, directors, or trustees of one complete all five columns, attach a should include all lobbying activities, organization serve as officers, directors, statement explaining why. In the whether expenses are incurred or not or trustees of the other organization. Instructions for Schedule A (Form 990 or 990-EZ) -11-

12 A historic and continuing relationship lines 51b(i) through (vi), regardless of its leased by, or provided free of charge to, exists when two organizations participate amount, if it is with a related or affiliated the reporting organization or the in a joint effort to work in concert toward organization. noncharitable exempt organization. the attainment of one or more common Unrelated organizations. Answer Line 51d. Use this schedule to describe purposes on a continuous or recurring Yes for any transaction between the the transfers and transactions for which basis rather than on the basis of one or reporting organization and an unrelated you entered Yes on lines 51a through several isolated transactions or activities. noncharitable exempt organization, 51c above. You must describe each Such a relationship also exists when two regardless of its amount, if the reporting transfer or transaction for which you organizations share facilities, equipment, organization received less than adequate answered Yes. You may combine all of or paid personnel during the year, consideration. There is adequate the cash transfers (line 51a(i)) to each regardless of the length of time the consideration where the fair market value organization into a single entry. arrangement is in effect. of the goods, other assets, or services Otherwise, make a separate entry for Line 51. Reporting of certain transfers furnished by the reporting organization is each transfer or transaction. and transactions. Except as provided not more than the fair market value of the Column (a). For each entry, enter the below, report on line 51 any transfer to or goods, other assets or services received line number from lines 51a through 51c. transaction with a noncharitable exempt from the unrelated noncharitable exempt For example, if you answered Yes to organization even if the transfer or organization. The exception described line 51b(iii), enter b(iii) in column (a). transaction constitutes the only below does not apply to transactions for connection with the noncharitable exempt less than adequate consideration. Column (d). If you need more space, organization. write see attached in column (d) and Answer Yes for any transaction, Related organizations. If the use an attached sheet for your including transfers for adequate noncharitable exempt organization is description. If you are making more than consideration, between the reporting related to or affiliated with the reporting one entry on line 51d, specify, on the organization and an unrelated organization, report all direct and indirect attached sheet, which transfer or noncharitable exempt organization if the transfers and transactions except for transaction you are describing. amount involved is more than $500. The contributions and grants received by the amount involved is the fair market value Line 52. Reporting of certain reporting organization. of the goods, services, or other assets relationships. Enter on line 52 each Unrelated organizations. All furnished by the reporting organization. noncharitable exempt organization to or transfers from the reporting organization with which the reporting organization is Exception. If a transaction with an to an unrelated noncharitable exempt related, or affiliated, as defined above. If unrelated noncharitable exempt organization must be reported on line the control factor or the historic and organization was for adequate 51a. All transactions between the continuing relationship factor (or both) is consideration and the amount involved reporting organization and an unrelated present at any time during the year, you was $500 or less, it is not necessary to noncharitable exempt organization must must identify the organization on line 52 answer Yes for that transaction. be shown on line 51b unless they meet even if neither factor is present at the end the exception in the specific instructions Line 51b(iii). Answer Yes for of the year. for that line. transactions in which the reporting organization was either the lessor or the Do not enter unrelated noncharitable Line 51a. Transfers. Answer Yes to lessee. exempt organizations on line 52 even if lines 51a(i) and 51a(ii) if the reporting you report transfers to or transactions organization made any direct or indirect Line 51b(iv). Answer Yes if either with those organizations on line 51. For transfers of any value to a noncharitable organization reimbursed expenses example, if you reported a one-time exempt organization. incurred by the other. transfer to an unrelated noncharitable A transfer is any transaction or Line 51b(v). Answer Yes if either exempt organization on line 51a(ii), you arrangement whereby one organization organization made loans to the other or if should not list the organization on line 52. transfers something of value (cash, other the reporting organization guaranteed the Column (b). Enter the exempt assets, services, use of property, etc.) to other s loans. category of the organization; for example, another organization without receiving Line 51b(vi). Answer Yes if either 501(c)(4). something of more than nominal value in organization performed services or Column (c). In most cases, a simple return. Contributions, gifts, and grants are membership or fundraising solicitations description, such as common directors examples of transfers. for the other. or auxiliary of reporting organization will If the only transfers between the two Line 51c. Complete line 51c regardless be sufficient. If you need more space, organizations were contributions and of whether the noncharitable exempt write see attached in column (c) and use grants made by the noncharitable exempt organization is related to or closely a separate sheet to describe the organization to the reporting organization, affiliated with the reporting organization. relationship. If you list more than one answer No. For the purposes of this line, facilities organization on line 52, identify which Line 51b. Other transactions. Answer includes office space and any other land, organization you are describing on the Yes for any transaction described in building, or structure whether owned or attached sheet Instructions for Schedule A (Form 990 or 990-EZ)

13 Index A G Noncharitable exempt Returns, group Accrual to cash basis, worksheet for General Instructions... 1 organization...11 Ruling letter request conversion to... 6 Grassroots expenditures... 9 Normally...3, 4 Address, for ruling letter Grassroots lobbying Affiliated groups...10 communications... 9 S O Assets test... 4 Gross receipts from activities related to Scholarships, etc organization s charitable, etc., Organization operated for the benefit of School... 4 purpose a governmental unit Section 403(b) annuity plan C Gross receipts from other than Organization operated to test for public Specific Instructions... 1 Communication with members... 9 disqualified persons... 6 safety... 5 Statements About Activities... 2 Communication, direct lobbying and/or Group returns Organizations, related Substantial contributor... 3 grassroots lobbying Groups, affiliated Organizations, unrelated Substantial part test... 2 Compensation of the Five Highest Paid Support... 3 Employees Other Than Officers, P Support from a governmental Directors, and Trustees... 1 H Part I... 1 unit... 3 Compensation of the Five Highest Paid Hospital medical research Part II... 2 Support Schedule... 5 Independent Contractors for organization... 4 Professional Services... 2 Part III... 2 Supporting organization... 5 Hospital or cooperative hospital service Compensation or repayment... 2 organization... 4 Part IV... 3 Contributions in excess of the 2% Part IV-A... 5 T limitation... 6 Part V... 7 I Test, assets... 4 Contributions, membership fees, and Part VI-A... 9 Indirect contributions... 3 Test, expenditure... 2, 4, 9 gross receipts from disqualified Part VI-B Information Regarding Transfers To Test, full and fair exposition... 9 persons... 6 Part VII and Transactions and Relationships Test, public support, facts and Control, common, element of With Noncharitable Exempt Penalties... 1 circumstances,... 5 Control, limited Organizations...11 Period covered... 1 Test, public support, section Private School Questionnaire (a)(1)... 4 D Pub. 525, Taxable and Nontaxable Test, substantial part... 2 L Definitions... 3 Income... 2 Tests, public support, section Legislation Direct lobbying communications... 9 Public charities, electing (a)(2)... 5 Legislation, attempting to Direct lobbying expenditures... 9 Public charities, nonelecting... 2 Transfers influence... 9 Disqualified person... 3 Public support test, facts and Legislation, specific circumstances... 5 Limited control Public support test, section U E Lobbying Activity by Nonelecting Public 509(a)(1)... 4 Unrelated organizations...12 Exempt organization, Charities Public support tests, section Unusual grants... 7 noncharitable...11 Lobbying Expenditures by Electing 509(a)(2)... 5 Expenditure test... 2, 4, 9 Public Charities... 9 Purpose of form... 1 W Expenditures, exempt purpose... 9 Who must file... 1 Expenditures, lobbying... 9 M Q Worksheet accrual to cash basis, Medical research... 4 Qualify... 2 conversion to... 6 F Family members... 3 N R Form Non-Private Foundation Status, Related organizations...12 Form Reason for... 3 Relationship, historic and Full and fair exposition test... 9 continuing...12 Index -13-